Fast-casual pizza chain MOD Pizza in the red, considers BANKRUPTCY FILING
07/09/2024 / By Olivia Cook
Fast-casual restaurant chain MOD Pizza appears to be in the red and is reportedly considering filing for bankruptcy.
Bloomberg News first disclosed the development, citing unnamed sources. The report said while bankruptcy is a possibility, MOD Pizza could still choose a different path. The company is “exploring all options” to improve its financial situation, according to a company spokesperson.
“We have a brand that our guests love, a dedicated team and a solid turnaround plan that’s making progress. We’re working hard to improve our finances and are considering all possible options. Since this is an ongoing process, it wouldn’t be appropriate to speculate on the outcome,” they said.
This news is surprising despite the wave of bankruptcy filings, potential filings or large-scale closures of various restaurant chains and franchisees. MOD Pizza had been a standout success story, growing rapidly and becoming the leader in the fast-casual pizza sector known for its “made-on-demand, customizable, individual-sized personal pizzas.” (Related: Restaurant industry collapsing across the US, with several popular chains permanently CLOSING DOWN numerous locations.)
MOD Pizza secured a funding of $160 million in 2019 when it operated 433 locations and aimed to expand to 1,000 locations within five years. The chain even filed for an initial public offering in 2021, though it never came to fruition. However, the pandemic and subsequent inflation likely hindered the company’s growth.
Despite challenges, MOD Pizza remains a success story within the fast-casual pizza sector. According to Technomic’s Ignite data, MOD Pizza ended fiscal 2023 with $732 million in domestic sales, a 10.7 percent increase from the previous year, outperforming competitors, like Blaze Pizza and Pieology.
In January, former Coopers Hawk executive Beth Scott was appointed CEO to replace co-founder Scott Svenson. This change indicated that there might be deeper issues within MOD Pizza.
MOD Pizza shuttered 26 restaurants during the first quarter
According to Restaurant Business magazine, MOD Pizza closed 26 restaurant locations in the first quarter of this year – which the chain confirmed on April 9. These closures included 25 company owned locations across 10 states and the District of Columbia, as well as one franchise location in Atlanta. The move reduced MOD Pizza’s total number of locations from 553 down to 527.
MOD Pizza spokesman Rick Van Warner noted that the closures affected five locations in California – where the pizza chain operates 53 restaurants. However, he clarified that the Golden State’s new $20 hourly minimum wage wasn’t the reason for the shutdowns. Rather, the closures were due to “underperformance” and the decision was based on business evaluations.
The distribution of closures included three restaurants each in Pennsylvania, Illinois, Texas and the District of Columbia; two in Wisconsin and Washington state; and one each in Florida, Oklahoma, Virginia and Oregon. Workers from the closed locations were given opportunities to transfer to other units or offered severance pay if they couldn’t or didn’t want to transfer.
Founded in 2008 by Svenson and his wife, MOD Pizza is known is known for its people-first mission. The chain provides opportunities for workers often overlooked by other employers, including those previously incarcerated or with developmental disabilities.
Check out Collapse.news for more stories about restaurant closures across the country.
Watch this video that discusses the bankruptcy of MOD Pizza.
This video is from the Daily Videos channel on Brighteon.com.
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bankruptcy, bankruptcy filing, bubble, business, closures, collapse, debt bomb, debt collapse, economic collapse, economic riot, fast casual, fast food, finance riot, food collapse, food supply, inflation, market crash, Mod Pizza, pizza chains, restaurant closures, restaurants, risk
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